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business ownership types - Coggle Diagram
business ownership types
LTD (private limited company)
advantages
limited liability: protects shareholders
stable structure: business remains even if shareholders change
easier to raise finance
disadvantages
directors' legal duties
greater admin costs
public disclosure of company information
sole trader
advantages
owner is their own boss: more freedom & satisfaction
quick and easy to set up: business can be transferred to limited company once launched
easy to close/shut down the business
disadvantages
unlimited liability: owner is responsible for all debt
harder to raise finance: limited funding
pay higher tax rate than a company
PLCs (public limited company)
disadvantages
higher set up & opperating costs
potential conflict between shareholders with different interests
loss of control for owners as ownership becomes more shared/distributed
advantages
limited liability
raising capital: selling shares to public through stock market
easily transferable ownership through stock market
partnerships
disadvantages
unlimited liability
potential conflict between partners
partners may honour decisions of others
advantages
partners can provide specialist skills
more potential at raising finance
simplest way for 2 or more people to create a business together
public sectors
advantages
job security: lower risks of layoff
work-life balance: more predictable hours
economic development
disadvantages
political interference
higher costs: public ownership can lead to higher costs for taxpayers
financial constraints: public sector budgets can often be limited